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What Gold Moving Out of NY Really Means About The US Economy

De Nederlandsche Bank (DNB) has adjusted its gold stock location policy and has shipped gold from the United States to the Netherlands to spread its gold stock in a more balanced way.

Under the previous policy, 11% of the gold stock was located in the Netherlands, 51% in the United States, with the remainder held in Canada (20%) and the United Kingdom (18%). Under the new policy, the breakdown by location is as follows: 31% in Amsterdam, 31% in New York, with the relative holdings in Ottawa and London remaining unchanged at 20% and 18%, respectively. Following this adjustment, DNB is in line with other central banks holding a greater part of their gold stock in their own countries. Beyond realising a more balanced distribution of the gold stock across the different locations, this may also have a positive effect on public confidence.

One of the real purposes of gold is to settle trade. It’s very simple to pile gold on a cart and push it between adjoining cells at the NY Fed and poof 300 million has changed hands. The loss of gold in the NY gold vaults, especially after much of it was stolen from the WTC vaults on 911, now has a chilling meaning – much of the world trade is moving away from NYC as a global center of deals and commerce.

Perhaps central banks will end up using their own version of BitCoin to settle exchanges. Gold is being repatriated based on the belief that America is no longer a safe place for it. Loss of confidence in America means more and more nations will be looking for a new way to settle large accounts while gold is used to prop up local currency printing.

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